The SEC said that employees of Oracle's India unit structured transactions with the government to allow distributors to hold $2.2 million in "unauthorized side funds." Those India employees then had distributors pay local vendors, which didn't provide anything to Oracle. The payments were covered up with bogus invoices.

Specifically, the hijinks occurred in 2005 to 2007. Oracle India sold enterprise software and services to the government through distributors and then parked funds off the books. The SEC provided an example of how the system worked:

Oracle India secured a $3.9 million deal with India's Ministry of Information Technology and Communications in May 2006. As instructed by Oracle India's then-sales director, only $2.1 million was sent to Oracle to record as revenue on the transaction, and the distributor kept $151,000 for services rendered. Certain other Oracle India employees further instructed the distributor to park the remaining $1.7 million for "marketing development purposes." Two months later, one of those same Oracle India employees created and provided to the distributor eight invoices for payments to purported third-party vendors ranging from $110,000 to $396,000. In fact, none of these store-front-only third parties provided any services or were included on Oracle's approved vendor list. The third-party payments created the risk that the funds could be used for illicit purposes such as bribery or embezzlement.